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Stryker (SYK: Baa1 pos / BBB+) : New Issue

HEALTHCARE
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  • Stryker are hosting investor calls for a dual tranche 8yr & 12yr Euro plus $BMK transaction
  • A few points to note from the roadshow:
  • SYK has conducted 50 acquisitions since 2011 but the vast majority are small add-ons.
  • Recent deals for Vocera $3.1bn and Wright Medical $5.4bn are mentioned by name but in the context of a $137bn market cap company are small
  • SYK has suspended all share buybacks since 2019 – even to compensate for dilution of stock options. This is quite a statement about preservation of capital.
  • Moody’s placed its rating on Positive outlook in March. They want to see leverage below 2.75x consistently for an upgraded. SYK are at 2.7x gross currently; we can expect them to return to single A before too long.
  • 6.8% of sales are reinvested in R&D. This allows a consistent growth of the business.
  • SYK trades at the tighter end of the Medical Devices sector: this is justified.

    • Source: MNI, Bloomberg


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  • Stryker are hosting investor calls for a dual tranche 8yr & 12yr Euro plus $BMK transaction
  • A few points to note from the roadshow:
  • SYK has conducted 50 acquisitions since 2011 but the vast majority are small add-ons.
  • Recent deals for Vocera $3.1bn and Wright Medical $5.4bn are mentioned by name but in the context of a $137bn market cap company are small
  • SYK has suspended all share buybacks since 2019 – even to compensate for dilution of stock options. This is quite a statement about preservation of capital.
  • Moody’s placed its rating on Positive outlook in March. They want to see leverage below 2.75x consistently for an upgraded. SYK are at 2.7x gross currently; we can expect them to return to single A before too long.
  • 6.8% of sales are reinvested in R&D. This allows a consistent growth of the business.
  • SYK trades at the tighter end of the Medical Devices sector: this is justified.

    • Source: MNI, Bloomberg